Time for a new poll. Based on results of the "happy face, sad face" poll, it sounds like folks want a new poll.
I find it strange that with the unconfirmed report late Friday night that Chesapeake would be selling their North Dakota acreage, there has been no confirmatory story (at least that I could find). It would be a huge story, and that's why I wonder about the accuracy of the story when I can't find anything else.
Having said that, assuming the source is correct, what do you think Chesapeake's acreage in North Dakota is worth to a buyer?
("Other" was not supposed to show up as an option. Sorry about that, but I don't have the time to correct the poll.)
Other, is the best option it is worth nothing unless the three forks proves viable. really moronic purchase, limited due diligence, I'm not an expert but I have not seen any data suggesting this would be a good place to go. When risk is high (wildcat) then lease should be low. 100 dollars anyone! Same thing happened to some of Oxy's acreage just not thermally mature.
ReplyDeletehttp://blog.newsok.com/energy/2013/03/01/reports-chesapeake-selling-bakken-shale-acreage/
ReplyDeleteThis supports the thesis somewhat.
Yes, that was the original source for my link. Late Friday night.
DeleteInterestingly nothing else has come out since then. Makes me wonder about the veracity of the "story."
You probably recall the stories where they ceased payments on some of the leases, overall very un-professional. Perhaps a small portion of the acreage is useable without a map it would be hard to tel.
ReplyDeleteShould have an "<$1000" option. I can't imagine that on average those CHK acres will bring even that. Chesapeake was late to the game in the Bakken so the bulk of their acres are well south of any existing production. The few CHK exploratory wells drilled essentially devalued most of their lease block (rather than derisked).
ReplyDeleteElsewhere CHK used this strategy successfully; 1. Tying up big blocks of mineral leases in unproven areas for very low rates. 2. After which they'd sell off a portion (half or less) in joint ventures to recover their entire initial costs. In Wyoming's Powder River basin this worked well, though in North Dakota it has left them with tens of thousands of acres nobody wants.
Whiting may want the most northern end of Chesapeake's holdings, though CHK may want them to 'buy it all' in order to get that piece. In which case it makes no sense for Whiting (or anyone) to pay even a $1000 per acre on average when 4/5th of what they're buying has virtually no value.
Every day with no reports from Chesapeake makes me less and less a "believer" of the story -- that it has sold its Bakken acreage. If so, you may be correct: asking price too high.
DeleteI think the going rate for most lease holders in that area was about $300 per acre. Add in about $200 more for administration cost and you have about $500 per acre, max. And I agree with everyone above, probably much less, unless well logs indicate something exceptional.
ReplyDelete400,000 acres x $500/acre = $200 million. Won't come close to what Chesapeake needs. Maybe that's the reason we haven't heard anything else since the original story.
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